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/EGBS/MBS: Treasuries drift off the day's...>

US TSYS
US TSYS: /EGBS/MBS: Treasuries drift off the day's price highs amid light
profit-taking. German Bunds and UK Gilts closed out their day higher, aiding
Tsys, now Tsys drift off as the European factor fades. Spain, Italy and Portugal
govt debt meanwhile weaken on the day.
- Buyside analyst Sadakichi Robbins noted "this tight range for cash 10-year
notes is holding, as the bottom of range at 2.30% intersects with the 200-day
moving average, while the yield top is protected by a 2.40ish double top.
Something has to give."
- He noted that "outside of 10's, there is plenty of movement in the Treasuries
curve (flatter) and swap spreads (wider) as combination of regulatory change and
global demand for safe yield interact."
- He noted on MBS that the MBS "basis has been behaving very well in the
flattening environment, as they reap benefit from the skew of their partial
durations."

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